Economic security in an era of globalization: definition and provision

Abstract

Globalization has undermined the traditional definition of economic security that centered on economic vulnerability to other states. At the same time, globalization has produced a redefinition of economic security in light of the risks posed by cross-border networks of non-state actors and by the economic volatility of the new global environment. The relationship between economic globalization and undesirable economic and political outcomes must be specified precisely and assessed carefully, however. Judgements about economic security must weigh the effects of increased volatility introduced by globalization against the benefits of improved economic performance in the longer run. Institutions can offset economic insecurity through the provision of insurance, shoring up policy credibility, and guiding adaptation to the new environment. National institutions will remain central to the provision of economic security under conditions of globalization. Regional and global institutions can complement one another (and national institutions) in their alleviation of the new economic insecurity. Although some regional institutions drifted in the wake of the Asian financial crisis, new regional alternatives have emerged that promise to stake out new modalities of economic security.     

Contesting the Governance of Capital Flows at the IMF

Financial crises can trigger different actors to reassess their ideas, interests, and policies, and sometimes change them. The Global Financial Crisis triggered a reassessment at the International Monetary Fund (IMF) regarding the utility of capital account liberalization and the management of capital flows. In 2010, the IMF embarked upon an official reassessment of these issues and in 2012 published an official “institutional view” on capital account liberalization and managing capital flows that gives more caution toward capital account liberalization and endorses the use of capital controls in certain circumstances. This article traces the political process that yielded the IMF's new view and draws out lessons for thinking about policy change in global economic governance institutions.     

Discretion and Politicization in EU Competition Policy: The Case of Merger Control

In a world where goods and services (but also people, capital and ideas) are increasingly ignoring national borders, competition policy has emerged as a highly salient issue at the heart of international trade discussions. Aspects of competition policy, from cartels and monopolies to state aids and the liberalization of the utilities, have become a regular feature in the pages of the financial and legal press and have become identified as a central element in any government's policy towards industry and its drive for competitiveness. This article focuses on European Union merger control and although appreciative of the dominance of economics and law in competition policy, stresses the political dimension to competition policy. A government and public administration perspective is essential. This is in evidence in the type of regime, the commitment to enforcing the law, the role of discretion and issues such as transparency and democracy. The example of merger control is used to illustrate how the European Commission (EC) has emerged and operates as a genuinely federal actor in determining and shaping merger policy throughout the EU. In short, this article accounts for policy development, the decision making process and in particular the degree to which discretion and politicization underpin one of the most crucial aspects of economic regulation.     

Japanese policy and the North Korean ‘soft landing’

Abstract

The nature of security on the Korean Peninsula has undergone fundamental change in the post‐Cold War period, characterized by the growing recognition on the part of the major regional powers that there is a need for economic as well as military approaches to security and conflict avoidance. The chief manifestation of this trend is the emergence of the US Department of State's ‘soft landing’ and other engagement policies as attempts to resolve North Korean security threats. Some commentators have seen the soft‐landing policy as an opportunity for Japan to use its economic power to contribute to regional and international security. This article examines the evolution and rationale of the soft‐landing policy, how Japanese policy‐makers evaluate its potential as a solution to the North Korean security problem and the current extent of Japan's contribution to it. The article also points out the‐limitations of Japanese support for the soft landing due to international restrictions on the Japanese government's room for diplomatic manoeuvre, domestic political obstacles to engaging North Korea and the general lack of Japanese private business interest in the North. Finally the conclusion shows that, despite the recognition of the need to engage North Korea economically, Japanese policy‐makers have devoted their energies principally to the redefinition of the US‐Japan military alliance based on the legitimacy of the North Korean threat.     

成渝经济区金融创新体系建设研究

金融创新体系是区域创新体系的重要组成部分和推动力量。成渝经济区金融创新体系建设面临的主要问题是金融支持体制不完善。加快成渝经济区金融创新体系建设,必须健全金融支持体制,完善信贷机制和风险投资市场,增强银行和风险投资机构的资金支持力度,为创新活动提供更加充足的信贷资金和风险资金。     

Debating Food Security Policy in Two Different Ideational Settings: A Comparison of Australia and Norway

Food security has emerged as a relatively new policy issue in agricultural policy making in developed countries. This policy problem is addressed within an institutional landscape in which agricultural ideas and institutions are well‐established. In this article, food security policy making in Australia and Norway is compared. In Australia, agricultural normalism (agricultural markets and production are considered to be similar to those of other economic sectors) has been dominant since the mid‐1980s, while Norwegian agricultural policy making has been dominated by agricultural exceptionalism (agriculture is considered a unique economic sector with special market and production conditions). It is demonstrated in the article how these two opposing institutionalised ideational foundations have influenced the nature of the food security debate in the two countries. In Australia, the debate emphasises the positive role of the market and trade in providing global food security. In Norway, the debate highlights the need to regulate market forces and restrict trade in order to allow countries to develop their own agricultural sectors.     

Ideology and Voter Preferences as Determinants of Financial Globalization

We propose that the global spread of ideas affects international economic openness policies, and that to omit ideology as an explanatory variable for economic globalization is to risk omitted variable bias. Using voting data, we create measures of global ideology regarding economic openness and propose that changes in both global and domestic ideology influence how open or closed to international finance an economy is. We also test other influences on liberalization, including proposed state-centered diffusion mechanisms. Using PCSTS and system-GMM models, we estimate the determinants of change in international capital account regulation for 82 countries, 1955 to 1999. We thereby examine diffusion of both liberalizations (1950s and 1990s) and closures (1960s and 1970s). Changes in both global and domestic ideology robustly influence liberalization and closure. The capital account policies of neighboring countries (positively) and of the leading economies (negatively) also influenced a country's capital account liberalization.     

‘Land grabbing’ or harnessing of development potential in agriculture? East Asia's land-based investments in Africa

Abstract

Large-scale foreign investment in Africa's abundant but largely underutilized arable land has been criticised by international NGOs and social movements as ‘land grabbing’, which limits access of smallholder farmers to land, deprives local people of their livelihoods and threatens local and national food security across the continent. By way of contrast, many host governments and some leading international development agencies regard land-based investments as beneficial for development in terms of providing the necessary capital and technological know-how for modernising the region's neglected agriculture including take-off in agribusiness and agro-industrialisation, which is vital to much needed economic diversification in many African countries. East Asia's participation in the global land rush on Africa is examined from the standpoint of these two different perspectives: while China's growing presence and involvement in trade and investment in mining, energy and infrastructure in Africa is well known, less recognised is its involvement and those of other East Asian countries such as South Korea, Malaysia, Singapore and Vietnam in agriculture through large-scale land acquisitions. The development consequences and policy implications of these foreign land-based investments are analysed from a political economy perspective, which identifies motives, interests and benefits of the different actors and addresses the question of governance in terms of transparency and appropriate institutional arrangements to safeguard land rights and food security. In the bigger picture, the paper argues that the negative consequences of land grab has to be seen alongside the benefits flowing to Africa from growing economic relations with China and other dynamic East Asian economies and learning from the development experiences of those countries. African countries however need to re-assess the current approach and relationship with foreign land-based investors and decide how best this trend can be used to forward their economic and social agendas.     

International Institutions and Domestic Compensation: The IMF and the Politics of Capital Account Liberalization

Certain governments have been faster than others in relaxing their restrictions on the cross‐border movement of capital. How can we explain the timing and extent of financial liberalization across countries since the 1970s? We argue that IMF stabilization programs provide a window of opportunity for governments to initiate financial reforms, but that policy makers are more likely to seize this opportunity when welfare expenditures are high. Large loans from the IMF shield policy makers from the costs of financial reform, while welfare expenditures provide credibility to the government's ex ante promises of compensation to individuals who are harmed by the reforms. We test this hypothesis on data for 87 countries from 1975 to 2002. We employ a spatial autoregressive error sample selection model which accounts for the nonrandom participation of countries in IMF programs as well as the processes of international policy diffusion. The results provide strong support for the interactive effect of IMF programs and domestic welfare expenditures on financial liberalization.     

The political obstacles to economic reform in North Korea: The ultra cautious strategy in comparative perspective

As a result of the financial crisis, some commentators see the reform process in the East Asian states as an outcome of the disciplining behaviour of financial markets that will lead to the emergence of a neoliberal form of capitalism. The Malaysian experience suggests, however, that progress to neoliberal forms of economic organization will not be inevitable, despite governments having to increasingly accommodate global markets. In Malaysia, the degree to which a neoliberal adjustment response could be embraced was limited by domestic political factors. First, the government needed to maintain the ethnic based distributive policy that favours ethnic Malays with material entitlements for reasons of state and regime security. Second, the state was not wholly insulated from a key social group that emerged as a result of the ethnic-based distributive policy, namely an elite Malay corporate group. A third reason was economic nationalism, a major component of Prime Minister Mahathir's vision for the country that stressed the building up of Malaysian corporations and conglomerates. Access to domestic sources of funds for adjustment and the centralization of power in the government, particularly in the office of the Prime Minister, facilitated this process of defending national economic arrangements, at least during the period in question. The limited liberalization of the ethnic based distributive policy did not, however, imply a shift in the ideological and policy agenda towards complete embrace of neoliberal norms and practices. The imposition of capital controls, although announced as a temporary measure to allow space for the government to pursue its preferred course of adjustment, further indicates that the commitment to free markets in Malaysia is instrumental. The Malaysian case suggests that movement towards neoliberal forms of economic organization as a result of the financial crisis may be limited and is not inevitable.     

The limits of economic globalization in East Asian developmental states

Abstract

In an attempt to adjust to economic globalization or internationalization, East Asian developmental states have liberalized their domestic economic systems, accelerating the introduction of the free‐market ideology. Despite their plan to establish the internationally compatible open‐market economy, however, the extent to which they can advance economic liberalization is limited. Political and economic burdens that the developmental state's extensive intervention in the market has incurred in the course of state‐led mercantile economic development, make it impossible for those states to execute full‐scale economic liberalization. The South Korean case clearly shows this. The Korean developmental state retains two major economic burdens: the exclusive ownership and the poor financial structure of the chaebôl. Insofar as Korean big business preserves those weak spots, the government cannot surrender the power of regulation despite its spontaneous implementation of the economic liberalization policy. In addition, the common ‘egoistic’ interests which government bureaucrats and the political class share also limit the degree to which economic liberalization policy can be implemented. The degree of state intervention in the market in Korea has been deeper than that in Japan which pioneered Asian developmental statism, and, thus, the political and economic burdens it has incurred for itself are heavier. Consequently, the East Asian developmental state cannot entirely withdraw its intervention in the market. The ‘support’ of industries is likely to diminish, but ‘regulation’ for the formation of the autonomous market will increase. For the Korean developmental state, globalization and economic liberalization are political economic slogans to re‐launch economic growth and to elevate the international economic competitiveness of industries under the initiative of the state, and motivated by nationalistic reasons. Hence, the role of the state in the market is still far from becoming redundant even in the tide of globalization and economic liberalization in the case of South Korea, where the legacy of strong developmental statism remains considerable.     

The Monitoring Capacity of Civil Society Networks: A Social Network Analysis in the Case of Gender Equality Policy

The role of civil society organizations (CSOs) as a watchdog in the implementation process is widely acknowledged. However, little is known about what determines their capacity to monitor EU policy implementation and how it differs across member states. This article accounts for social capital as well as human and financial capital to determine the monitoring capacity of CSOs. To capture sources of social capital, a network analysis is applied in a comparative case article on the monitoring networks of national platforms of the European Women’s Lobby across eight EU member states. The analysis reveals that CSOs in western member states are rich in human, financial and social capital, while CSOs in CEE member states compensate for this lack of resources by linking up with the Commission.     

Political context,policy networks and policy change: the complexity of transition in Hong Kong

Abstract

Central to the debates on the transition of Hong Kong to Chinese sovereignty is how this process has affected change in the policy process and policy outputs. Many see policy change as a result of the evolving political environment in Hong Kong following the political transition. This article, however, adopts the notion of policy networks and argues that the analysis of policy change cannot be reduced to a simple contextual stimulus – the policy alteration model. A case study – ‘the development of civic education’ – demonstrates the importance of policy networks, as a particular structure of government and group relations in decision making, in explaining the course of policy change. It is apparent that the relationship between regime change and political liberalization, on the one hand, and established networks, on the other, tends to be complex and dialectical in Hong Kong. Despite the importance of sovereignty transition and political restructuring, the effect of contextual factors on public policy greatly depends on the nature of the network involved.     

Different by Design? Analyzing How Governments Justify GMO Liberalization through the Lens of Strategic Communication

GMO liberalization can be seen as politically risky for policy actors; it confronts them with policy‐specific strategic challenges and incentives regarding their policy communication. This perspective has received much more attention in association with two other kinds of policies, welfare state retrenchment and foreign policy. The aim of this paper is thus to situate GMO liberalization within a larger framework and to examine how governments deal with this kind of policy through their communication. The analysis looks at the liberalization of GMOs in Norway and the UK to examine how their communication depends on policy characteristics as well as country‐specific conditions. The findings suggest that the communication of GMO liberalization differs markedly from the communication of welfare state retrenchment and foreign military interventions and that the typical features of GMO policies as well as the sociocultural context of the two countries mattered for how the governments have communicated GMO liberalization.     

Globalization and the Strengthening of Democracy in the Developing World

Scholars and policy makers have long assumed that trade and financial liberalization encourages developing countries to become more democratic; yet no one has developed formal hypotheses about the causal relationship between globalization and democracy. This article shows that these two trends are indeed related, but not necessarily in the direct manner that has commonly been postulated. Combining theories of embedded liberalism and conflict-based theories of democracy, the model presented here depicts the process that affects decisions to strengthen democracy as trade and capital flows increase. I argue that increasing exposure to international export and financial markets leads to improvements in democracy if safety nets are used simultaneously as a strategy for providing stability and building political support. Empirical evidence is provided by econometric analysis covering 59 developing countries for the time period 1972–97.     

Managing Dynamic Public Sector Networks: Effectiveness,Performance, and a Methodological Framework in the Field of National Security

ABSTRACT

Networks are increasing in number and in importance across the security field as a means of providing inter-agency coordination. Based on a large qualitative study of networks in the field of national security in Australia, this article aims to advance our knowledge of the internal properties of public sector networks in the field of national security and the conditions shaping their performance. It puts forward a multi-level theoretical framework involving five interdependent levels of analysis—structural, cultural, policy, technological, and relational—which aims to account for the internal properties of networks and examines each of these levels in relation to public sector networks in the field of national security. Using detailed interviews with senior members of security, law enforcement, and intelligence agencies, the article aims to highlight the potential lessons this framework has for strategically organizing and managing dynamic networks within and beyond the field of national security.     

Theory to Practice: Policy Recommendations for Fostering Economic Development through Social Capital

Proponents of social capital theory have long argued not only that it is in the best interest of civic life to build social capital but also that social capital is vital for the economic health of communities. This has been confirmed by recent research showing that social capital, especially in its bridging form, is positively associated with job creation at the metropolitan statistical area level. At the same time, social capital is often viewed as something either inherent or absent within a community. This article takes on that assumption by presenting a policy‐based approach to developing social capital. It provides two theoretical explanations for how social capital affects economic development and identifies four lessons for economic development practitioners to use to enhance social capital. These research‐based recommendations for economic development practitioners and policy makers seek to improve the social capital and, consequently, the economic development of their community.     

The Internet and Asia-Pacific security: Old conflicts and new behaviour

The positive uses of the Internet by civil society groups, research ­institutes, governments and other entities interested in promoting Asia-Pacific community building and cooperative security regimes have been studied and ­appreciated. The paper begins with a discussion of regional Internet diffusion patterns and the associated increase in Internet incidents. In the wake of 11 September 2001 and recent analysis of the 'dark side' of the Internet and networks, it then examines some of the destructive ways Internet technologies are being used by actors in the Asia-Pacific region. It provides examples from the patterns of Internet conflict involving a quadral relationship among four nodes, uncivil society, civil society, government and business as well as the pattern of conflict within each of the nodes. Finally, it looks at three topic areas - national security agendas, the making of security policy and the regional security dialogue process - that deserve further attention.     

Remaking New Zealand's Economic Policy: Institutional Elites as Radical Innovators 1984–1993

During the mid-1980s and early 1990s the New Zealand economy moved from being one of the most regulated outside the former communist bloc to among the most liberal in the OECD. Largely unheralded and begun by an ostensibly social democratic Labour government, changes included the floating of the exchange rate; extensive liberalization of financial, capital and other markets; lowering of trade protection; fiscal restraint and monetary disinflation; changes to the machinery of government; corporatization and then sale of state assets; and changes to industrial relations frameworks (Castles, Gerritsen and Vowles 1996). Known as Rogernomics after Minister of Finance Roger Douglas, these economic policies were heavily derivative of neoclassical economic theories, such as the New Classical and Chicago schools, public choice and new institutional economics (Boston et al. 1996, ch. 2; Goldfinch 1997). This article explains how such radical economic restructuring occurred through the influence of a select group of strategically located institutional elites.     

TESTING ALTERNATIVE EXPLANATIONS OF CAPITAL CONTROL LIBERALIZATION*

The literature on why restrictions over capital flows have been liberalized is filled with alternative causal stories (the pluralist, statist and systemic model, and economic explanations). In this article, we provide a test of these models of capital control liberalization within the context of 18 OECD countries from 1967 to 1995. We have avoided the usual practice of aggregating multiple governments in one country within one year into one country‐year observation, and use the country‐year‐government as the unit of analysis instead to correctly test the relationship between government characteristics and liberalization policy. We find that when the government considers lifting or imposing restrictions over capital flows, it responds to both systemic pressures and the key supporters of free capital flows. Governments also consider the current account balance and are heavily influenced by the prior policy choice regarding restrictions on capital transactions. We fail to find support for such explanations as the impact of government ideology, government strength, and central bank independence.